FEDERAL RESERVE WARNING: Waller Says More Interest Rate Hikes May Be Needed To Bring Inflation Under Control

Federal Reserve Governor Christopher Waller warned Thursday that additional interest rate increases may be necessary to bring American inflation back toward the central bank’s 2% target, although policymakers have flexibility in deciding when to act. His comments were delivered at a central banking forum in Istanbul, Reuters reports.

Waller said the Federal Reserve does not necessarily need to raise interest rates at consecutive policy meetings, even if officials ultimately determine that further tightening is required.

His remarks come as inflation remains above the central bank’s target and the American economy continues to face pressure from elevated energy prices.

The war with Iran has contributed to higher oil prices, creating additional concerns about the cost of fuel, transportation and other goods.

At the same time, stronger economic activity and increased investment connected to artificial intelligence have complicated the Federal Reserve’s assessment of inflationary pressures.

Federal Reserve officials are preparing for their next scheduled policy meeting on October 27 and 28. The current benchmark interest rate stands between 3.75% and 4%.

Waller indicated that policymakers have room to assess incoming economic data before deciding whether additional increases are required.

The governor said the Federal Reserve’s approach will depend on the direction of inflation and the strength of the broader economy, rather than a predetermined sequence of rate increases.

(YWN World Headquarters – NYC)